COVID-19 AND SETTLEMENT OF LABOR REGIMES WHEN ENTERPRISES MEETING DIFFICULTIES IN BUSINESS WHICH ARE INFECTED BY DISEASES UNDER THE LAWS OF VIETNAM
Therefore, QNT Law Firm would like
to send this Legal Update to you in order to help you get a basic view on some
of legal issues related to settlement of labor regimes when enterprises meeting
difficulties in business which are infected by diseases, namely: work suspension, temporarily
assign an employee to perform a job which is not stated in the labor contract, suspension of a labor contract, unilaterally
terminate labor contracts of employers under the laws of Vietnam. Hopefully
this document will be useful to you in the meantime.
When Enterprises meet difficulty
in doing business due to the Covid-19 epidemic, depending on the actual
situation, depending on the needs and the ability of labor arrangement of the
enterprises for each labor position, the Enterprises can choose the following
options to solve employment difficulties.
Under the provisions of laws of
Vietnam, Work suspension the case where the employee has to stop working at the
workplace for a specific time due to (i) the fault of the employee; or (ii) the
fault of the employer; or (iii) power or water incidents rather than the fault
of the employer, employees or for other objective reasons such as natural
calamity, fire, dangerous epidemic, enemy sabotage, relocation of the operation
place upon request of a competent state agency, or for economic reasons[2].
Accordingly, in case of work suspension due to dangerous epidemics, the employee shall be paid as follows: the wage for work suspension must be agreed
by the two parties but must not be lower than the regional minimum wage
stipulated by the Government[3].
In addition, on 25th March, 2020, the Ministry of Labor, War
Invalids and Social Affairs issued Official Letter No. 1064/LDTBXH-QHLDTL
providing guidance on payment of wage in case of work suspension and benefits
for employees during the period of work suspension related to the epidemic of Covid-19 (“"Official
Letter No. 1064/LDTBXH-QHLDTL”), in which, Section 3 of the Official Letter
stipulates: “In the case of an employee
who has to suspend the work due to the direct impact of the epidemic Covid-19
such as: (i) the employee is a foreigner in the period of not returning to the
enterprise to work at the request of the competent authority; (ii) the employee
has to suspend the work during the quarantine period at the request of the
competent authority; (iii) the employee has to suspend the work because the
enterprise or the division of enterprise
is inoperable because the employer or other employees in the same enterprise or
division are in the period of quarantine or if not yet returned to the
enterprise, the wage of the employee in case of work suspension during the
period of suspension shall comply with Clause 3, Article 98 of the Labor Code
(the wage must be agreed by the two parties but must not be lower than the
regional minimum wage stipulated by the Government).”
Subsequently, state agencies have issued a number of
documents to request the suspension of activities such as teaching and trading
services such as spas, discos, cinemas, massage, karaoke, ..., on 3rd April,
2020, the Government Office issued Official Letter No. 2601/VPCP-KGVXto require
factories and production facilities; traffic and construction works; business
establishments providing services and essential goods (such as food, medicine;
petrol, oil; electricity; water; fuel, ...); educational institutions, banks,
treasuries, service-providing establishments directly related to banking
activities and business supplements (such as notaries, lawyers, registry,
registration of secured transactions. ..), securities, post,
telecommunications, support services for transport, import and export of goods,
medical examination and treatment, funerals, ... (hereinafter collectively
referred to as “Business Facilities”) suspend non-urgent activities, reduce
employee concentration. So, even though Official Letter 1064/LDTBXH-QHLDTL does
not mention the paying the wage of work
suspension due to Business Facilities suspend operation according to the above
provision, but the employee who had to suspend the work because Business
Facilities had to suspend operation is also paid the wage of work suspension as
prescribed.
Accordingly, the settlement of the
regime for employees during the timing of work suspension due to Covid-19 must be carried out as follows:
·
Firstly,
due to the Covid-19 epidemic
and/or your business situation is difficult, you may allow employees to suspend
the work.
·
Secondly,
time of work suspension is: (i) the time which the employee has
not yet returned to the Enterprise, for foreign employee; (ii) the time which
the employee is isolated at the request of a competent authority; (iii) the
time which Enterprise or a division of Enterprise is inactive for a while
because because the employer or other employees in the same Enterprise or the
division are in the period of quarantine or if not yet returned to the
enterprise; (iv) the time which Enterprise has to suspend operations.
·
Thirdly, the wage in time of work
suspension: in the time of work suspension, Enterprise still must pay wage to
employee. This wage will be agreed upon by the Enterprise and the employee, but
must not be lower than the regional minimum wage stipulated by the Government[4].
Under the provisions of laws of
Vietnam, in case of an
epidemic, the employer is
entitled to temporarily assign employee to
perform a job which is not stated in the labor contract[5].
In addition, Section 3 of Official Letter No. 1064/
LDTBXH-QHLDTL stipulates: “In case of
enterprises meeting difficulties in raw materials and markets, resulting in not
having enough jobs, the employer may temporarily
assign employee to perform a job which is not stated in the labor contract
according to the provisions of Article 31 of the Labor Code”.
Accordingly, the temporarily assigning employee to perform a job which
is not stated in the labor contract due to Covid-19 must be done as
follows:
·
Firstly, regarding to the time for temporarily assigning employee to perform a job which
is not stated in the labor contract: does not exceed 60 accumulated
workdays within one year, if this time is longer than 60 days, it must be got
the consent by the employee[6].
·
Secondly, regarding to the procedure, Enterprise must inform the employee at least three
(03) working days in advance and must obtain the agreement of Trade
Union on temporary assigning of employee to do other work[7].
If Enterprise want to assigning employee to perform a job which is not stated
in the labor contract more than sixty (60) accumulated workdays within one year,
Enterprise must obtain a written consent of the employee.
·
Thirdly, regarding to wage: Employee is paid
according to his/her new work; if the wage of the new work is lower than the
wage of old work, the old wage shall be the remain for thirty (30) working
days. The wage for new work must be at least eighty five percent (85%) of the
wage of old work but must not be lower than the regional minimum wage
stipulated by the Government.
Under the provisions of laws of
Vietnam, Enterprise and
employee may agree on the suspension of a labor contract[8].
In addition, Section 3 of Official Letter No.
1064/LDTBXH-QHLDTL stipulates: “... if
the time of work suspension last, which affects the ability of payment of
enterprise, the employer and the employee may agree on the suspension of a
labor contract according to Article 32 of the Labor Code ...”
Accordingly, the suspension of a
labor contract due to Covid-19 is carried out as follows:
·
Fistly, regarding to term: as agreed by Enterprise
and employee.
·
Secondly, regarding to the procedure: a written
agreement is required between the Enterprise and employee.
·
Thirdly, regarding to the wage: Enterprises do
not have to pay wage and social insurance to employee during the term of suspension
of a labor contract.
·
Fourthly, regarding to reinstatement
of employee upon expiry of the term of suspension of a labor contract: Within
fifteen (15) days after the date of expiration of the employment contract
suspension, the employee must be present at the workplace or other term agreed
by Enterprise and employee to continue working[9].
In this case, Enterprise must reinstate the employee, unless otherwise agreed
upon by the two Parties[10].
Under the provisions of laws of
Vietnam, Enterprise has the
right to unilaterally terminate labor contracts with employees due to epidemics
when Enterprise has sought all remedies but is still forced to narrow its
production and reduce its working places[11].Accordingly,
in order to exercise the right to unilaterally terminate the above-mentioned
labor contract, Eenterprise needs to:
·
Firstly, must prove that Enterprise has sought
all remedies but is still forced to reduce its production and reduce its working
place.
·
Secondly, must inform the employee in advance on
terminate labor contracts according to regulations of laws[12]
and must obtain a written agreement with the Union is required[13]
·
Thirdly, paying severance
allowance for the employee according to regulations of laws[14]:
·
Fourthly, Enterprise is
prohibited from unilaterally terminating a labor contract[15]:
- The employee is sick or has a work accident or occupational disease and is being treated or nursed under the decision of a competent health establishment, except the case the employee is sick or has an accident and remains unable to work after having received treatment for 12 consecutive months, in case he/she works under an indefinite-term labor contract, or for 6 consecutive months, in case he/she works under a definite-term labor contract, or more than half the term of the labor contract, in case he/she works under a labor contract for a seasonal job or a specific job of under 12 months[16].
- The employee is on annual leave, personal leave or any other types of leave permitted by Enterprise.
- The employee is on maternity leave in accordance with the Law on Social Insurance.
In addition to the above-mentioned
options, if Enterprise is in economic difficulties and has forced many
employees to quit their jobs, Enterprise must elaborate and implement a labor
utilization plan to terminate labor contracts in accordance with Article 44 and
Article 46 of the Labor Code No. 10/2012/QH13. Enterprise can only terminate
the labor contracts after discussion with Trade Union and notify thirty (30)
days in advance to the provincial-level state management agency of labor.
««
For further
information please contact
QNT LAW FIRM
Add: Floor 8, Office
Bulding Loyal, 151 Vo Thi Sau, W. 6, Dist. 3, HCM City, Vietnam
Tel: (+84) 916 599 189 | (+84) 918 483 689
[1] Replaced
by the Prime Minister's Decision No. 447/QD-TTg dated April 1, 2020
[2] Article 98 Labor Code No.
10/2012/QH13
[3] Clause 3 Article 98 Labor
Code No. 10/2012/QH13
[4] Decree No. 90/2019/ND-CP
dated 15th November, 2019 of the Government stipulating the regional minimum
wage for employees working under labor contracts
[5] Clause 1, Article 31 of the Labor Code No.
10/2012/QH13; Point a Clause 1 Article 8 of the Government's Decree No.
05/2015/ND-CP of 12th January, 2015 detailing and guiding the implementation of
a number of contents of the Labor Code No. 10/2012/QH13
[6] Clause 1, Article 31 of the Labor Code No. 10/2012/QH13; Clause 3, Article 8 of the Government's Decree No.
05/2015/ND-CP of 12th January, 2015 detailing and guiding the implementation of
a number of contents of the Labor Code No. 10/2012/QH13
[7] Clause 7, Article 192 of the Labor Code No.
10/2012/QH13
[8] Clause 5, Article 32 of the Labor Code No. 10/2012/QH13
[9] Clause 1, Article 10 of the Government's Decree No.
05/2015/ND-CP of 12th January, 2015 detailing and guiding the implementation of
a number of contents of the Labor Code No. 10/2012/QH13
[10] Article 33 of the Labor Code No. 10/2012/QH13
[11] Point c Clause 1, Article 38 of the Labor Code No.
10/2012/QH1313; Clause
2, Article 12 of
the Government's Decree No. 05/2015/ND-CP of 12th January, 2015 detailing and
guiding the implementation of a number of contents of the Labor Code No.
10/2012/QH133
[12] Clause 2, Article 38 of the Labor Code No. 10/2012/QH13
[13] Clause 7, Article 192 of the Labor Code No.
10/2012/QH13
[14] Article 38 of the Labor Code No. 10/2012/QH13; Clause 1, 3, 4, 5, 6 of Article 14 of the Government's Decree No.
05/2015/ND-CP of 12th January, 2015 detailing and guiding the implementation of
a number of contents of the Labor Code No. 10/2012/QH13; Clause 5, 6, 7, 8 of
Article 1 of Decree 148/2018/ND-CP dated October 24, 2018 of the Government
amending and supplementing a number of articles of the Government's Decree No. 05/2015/ND-CP of 12th January, 2015
detailing and guiding the implementation of a number of contents of the Labor
Code No. 10/2012/QH13
[15] Article 38 of the Labor Code No. 10/2012/QH13
[16] Point b Clause 1 Article 389 of the Labor Code No.
10/2012/QH13
